A prediction market analyst says more congressional offices will likely follow Massachusetts Democrat Seth Moulton's (D-MA) lead after he became one of the first members of Congress to ban his staff from trading on platforms like Polymarket and Kalshi.
Effective Wednesday, Rep. Moulton's office-wide policy prohibits all staff, including district, legislative, communications, and operations personnel, from trading or holding positions on political, legislative, regulatory, or geopolitical outcomes, or on any information learned in an official capacity.
Effective today, Congressman Moulton is instituting an office-wide policy prohibiting his congressional staff from participating in prediction market platforms, such as Polymarket and Kalshi.
The ban arrives amid a growing push by lawmakers on both sides of the aisle to crack down on insider trading in prediction markets, a concern that has arisen as anonymous traders have posted outsized gains on politically sensitive events, fueling suspicions that government insiders are cashing in on non-public information.
“I think everyone is very conscious of the potential for and optics around insider trading around government actions,” prediction market analyst Dustin Gouker told Decrypt, noting he expects “a lot of other Congressional offices will take similar actions, even if it’s done publicly.”
“I think it’s quite clear that insider trading on things going on in Washington isn’t kosher or welcome at CFTC-regulated prediction markets,” Gouker said. “Creating clear and meaningful penalties by law would make it abundantly clear,” though he acknowledged some may still attempt it.
The bipartisan bill seeks to prohibit members of Congress, their spouses and dependent children, the President and Vice President, political appointees, and other senior officials from trading on political events, policy decisions, or government actions on prediction markets.
Violations would carry a civil penalty of 10% of the transaction's value, plus full disgorgement of profits paid into the U.S. Treasury.
Gouker, however, tempered expectations on how clean markets can ever get.
"Getting to 100% is probably an impossible ideal," he said, referring to eliminating insider trading entirely, but noted that “better rules, laws, and surveillance can likely make it much more difficult.”
Decrypt has reached out to Polymarket and Kalshi for comment.
